H&R Block Gets Green Light on Federal Bank Charter

In
another example of our government not protecting us when it comes to
national bank practices, the Office of Thrift Supervision has granted H&R
Block a federal bank charter, at the same time that New York Attorney General
Eliot Spitzer is going after H&R Block for fraudulent marketing of individual retirement accounts, California Attorney General Bill Lockyer is suing the company for refund anticipation loans that target low income families.   

We
shouldn’t be surprised. After all, the Office of Thrift Supervision (regulator
of savings banks, and savings and loans) and the Office of the Comptroller of
the Currency (which regulates national banks) haven’t been impressing consumer groups with their consumer protection efforts.

"Block
has had a long history of selling high cost, abusive products using
questionable tactics," warned Chi Chi Wu, a staff attorney for the
National Consumer Law Center in a press release today. "Despite lawsuit after lawsuit claiming
consumer abuse, including one by the New York Attorney General on the same day
Block’s bank charter approval was announced, the OTS seems to think this is the
kind of company fit to be a bank."

Consumer
groups are criticizing H&R Block for high cost refund anticipation loans, high-cost IRA’s, and subprime loans offered
through its mortgage company Option One.

"Given
all of Block’s corporate missteps and gouging of low-income consumers, it leads
us to wonder exactly who can’t get a federal charter from the OTS," said Kevin
Stein, Associate Director of the California Reinvestment Coalition in the same
press release.

Good question, indeed.

Tagged as: Bank charter, Bill Lockyer, Block, California Reinvestment Coalition, Chi Chi Wu, Elliot Spitzer, H&R Block, IRA's, national banks, national consumer law center, New York Attorney General, Office of the Comptroller of the Currency, Office of Thrift Supervision, Option One, OTS, savings and loans, savings banks, subprime loans

Gerri Detweiler Credit.com's Personal Finance Expert, Gerri focuses on financial legislation, budgeting, debt recovery and consumer savings information. She is also the co-author of Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights, and Reduce Stress: Real-Life Solutions for Solving Your Credit Crisis as well as host of TalkCreditRadio.comTalk Credit Radio. Reach Gerri at creditexperts@credit.com.